I want to know whether TDS is deductible on Testing Charges paid to Engineers on material sent to his Laboratory for testing. In my view TDS shud be deducted under 194J but confused. And on which amount i.e including service tax or only on testing charges. Plz also give the descripttion along with clarification on amount & Section.
Tds on testing charges of materials
Replies (3)
Quick Summary
yes TDS applicable U/s 194J 10% on total amount i.e including Service tax amount.
Threshold limit Rs.30,000
The tds applicability for testing and inspection charges shall be as per the agreement. If it is done on a contract basis then the tds shall be applicable as per section 194C and if it comes under technical services then the same shall be deductible under section 194J
Updating the position:
• Lab testing of materials against standards (strength, quality, chemical analysis) is generally treated as technical services: Sec 194J(a) at 2% (since 1 April 2020; earlier 10%).
• Some benches treat standardised lab tests, available to everyone at fixed rates, as not "technical services" (applying the SC's Bharti Cellular reasoning). The 2% rate under 194J(a) is the safer middle course.
• Threshold: Rs 50,000 a year (from 1 April 2025; earlier Rs 30,000).
• Deduct on the value excluding GST/service tax if shown separately (CBDT Circular 23/2017). So "on the total including tax" is no longer correct.
• Testing by a government lab: TDS does not apply on payments to the government (Sec 196).
• From 1 April 2026: Sec 393 of the Income-tax Act, 2025, with the same rate.
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